Obama's "Millionaire Tax" Collected Over Next Ten Years Will Plug 4 Months Worth Of Deficit

In order to keep the ongoing class warfare waged by the administration in perspective, today the CBO was kind enough to score the revenue impact of the proposed and much debated Buffett Tax, now appearing in non-populist literature as "Surtax on Millionaires." According to the Budget Office, said tax which is the source of substantial consternation among the population, would generate, over the next decade, a grand total of... drum roll... $453 billion. Why the drum roll? Because as we pointed out a few days ago, the US closed the 2011 fiscal year having added $1.23 trillion in debt (a number which would have been $1.4 trillion absent some year end settlement gimmickry). In other words, last year the US government had on average a $100+ billion deficit each month. In yet more other words, the great populist gimmick that is the Buffett Tax will have the great benefit of generating, between 2011 and 2021 enough money to plug a debt hole, at the rate America currently spends money, of 4 months.

As you requested, CBO and the staff of the Joint Committee on Taxation (JCT) have estimated the budget impact of S. 1660, the American Jobs Act of 2011, as introduced in the Senate on October 5, 2011. CBO and JCT estimate that, in total, enacting S. 1660 would decrease deficits by about $6 billion over the 2012-2021 period (see enclosed table). That estimated deficit reduction of $6 billion over the coming decade is the net effect of $447 billion in additional spending and tax cuts in titles II through III and $453 billion in additional tax revenue from the surtax specified in title IV.

S. 1660 is similar to S. 1549, the American Jobs Act of 2011, as introduced in the Senate on September 13, 2011. Provisions in title I, II, and III related to both federal revenues and spending are identical for the two bills. The only difference between the bills is that S. 1660 replaces the provisions in title IV (Offsets) of S. 1549 with a surtax of 5.6 percent, starting in 2013, on a taxpayer’s modified adjusted gross income in excess of $1 million (or $500,000 in the case of a married individual filing a separate return), indexed for inflation. JCT estimates that title IV of S. 1660 would increase revenues by $453 billion over the 2012-2021 period, whereas title IV of S. 1549 would increase revenues by $450 billion over that period.

I recently read a study about how the best athletes in the world, despite their clear success, benefit from something called ability and motivation. Since world class athletes only account for a small fraction of a percentage of the population at large, it has been advocated that any athletes who have benefited to the tune of billions, worldwide, collectively, be forced to wear ankle-weighs in proportion to their income, it will allow hundreds of millions of people to participate in the professional sports industry, which as we know accounts for trillions of dollars annually and would likely generate a huge spike in job creation.

The NFL's annual budget is easily in excess of 200 billion per year and that excludes MLB, NBA and NHL (which we know is negligible) but also excludes the billions earned all over the world especially in the world's most popular sport known to Americans as soccer.

Similarly, if boxers were forced to wear weighted arm bands, their added slowness would permit many non-competitors to compete for juicy purses offered in that field.

The combined value of athletic equalization could generate hundreds of thousands of jobs.

Likewise, if athletes were required to submit to regulation by unemployed couch-sitting video-gamers, then video gamers could take a share of the incomes earned by those athletes, by providing near time regulatory advice to those athletes through text screens mounted in helmets fixed on the athletes head gear.

If we could just harness the untapped financial resources of professional and world class athletes through the careful application of technology, we could generate further trillions in tax revenue from the newly created job markets for people with inferior talents who would ride piggy back on existing human resources.

A transaction tax would act as a natural rev-limiter on such silly activity and provide a means of funding their inevitable bailout when their irrational exuberance boils over into outright cognitive dissonance (sorry, CD, had to).

I knew that most people would not like this idea but it does not seem fair to me that I have to pay Taxes on an asset called Real Estaste while others like Buffet do not pay an asset tax on their Stocks.

The way to get around Goldmans HFT would be to tax any gain on a Stock held less than 3 months at a 75% Tax rate. Assets Taxes on Stocks would be Taxed every month. That way if you liquidated to avoid the Tax you would in effect be Taxed at 75%. As with the HFT Computers, they earn, from what I have read about a Million Dollars a day. That would be a $750,000. Dollars a day going into the Treasury, per Computer or Company running HFT Computers.

We have to remember that it was the large Banks and Investment Banks that got us into this situation. Most of the Debt created in the last 3 years was due to their irresponsibility.

The American People should not be debating who pays for the Debt created to Bail Out the Banks but how to get the Banks to pay back the Debt created to keep them solvent.

You guys are all so cute getting worked up over a millionairs tax plan. The whole thing is going to come crashing down soon anyway and the only ones left with a pot to piss in will be sitting on PHYSICAL PM...LIKE ME.

Now how do you tax that which you dont know I have (no reporting required) and I wont be converting it until I feel confident the new economy is safe.

None of these plans will ever work until NAFTA/GATT/WTO are tossed onto the woodpile of history and set ablaze. Drag Mickey Kantor and his ilk out and throw them onto the pile as well. Any of these punk-ass globalist CEO's that put up an argument, toss them on the pile as well.

Until the western world realizes that they need to produce, not consume, this whole thing is a global trainwreck.

Globalization has failed. The faster we all figure that out, the faster we can rebuild the world economy.

The dumb fucks running our country are absolutely clueless. Not only do they like to spend- because not spending is hard. Not spending means telling people no. It means losing votes. If that weren't bad enough, the majority of this crew couldn't balance a checkbook. The are seriously math challenged to the point of being retarded. I mean that.

Interesting that for the first time ever, the TEA PARTY said no. And the rst of Congress stomped the floor iike little kids at the WalMart when told to put the gummi worms back.

More anti Obama deceit from ZH… btw, it is not Obama’s Millionaire tax, it was proposed by congress.

So a tax on millionaires won’t wipe out the entire debt…what Machiavellian trite! Last time I looked, firing teachers, bus drivers, and first responders didn’t cover the debt either... where's your contempt for those actions!

I knew there were several Tyler’s… but wasn’t aware Eric Canter was one of them... or maybe it's Kyle Bass, who used the same lame argument when questioned about "any" tax on the rich today on CNBC (of course the the on air lackey just smiled and nodded in agreement).

You can forget about the red pill or the blue pill. After we pass through the next monetary "event horizon," we will be so collectively brainwashed that the concept of "choice" will be sanitized out of our national awareness.

If months were shortened from 4 weeks to 1 week, that would extend it to 16 months.

So that's an extra 12 months, a whole year! With annual deficits in excess of $2 trillion, that's like 5 times more than the projected benefit.

And as 5 is greater than 4, after the tax was allowed to expire in say 10 years, we'll have banked an extra several months of space-time that could be used to reduce the rertirement age or prepare for an extra terrestrial invasion.

I enjoy the equal-opportunity pilloring of both sides of the political aisle on ZH, but I'm confused as to what (if any) policy prescriptions ZH would be consider beneficial.

Here would make a nice post. Tyler summarizes what he think fiscal and monetary policy should be, and who (if anybody) in US politics comes close to advocating the ZH position? Might be a useful crib sheet as the primary season gets underway.

Provide a permanent (constitutionally required) National Depository Bank, so the ordinary people never again have zero choice and zero real competition, and no longer have to play and suffer by the bankster's rulz-of-financial-war.

spoken like top 1%ers. Of course you should pay more. This are historically low tax rates and are not sustainable unless you're prepared to default on debt, eliminate the military, etc. The argument that 50% of the pop pays no tax just makes me shrug my shoulders. So? They also have no assets, half of them live below the poverty line and half of them have been unemployed for much or all of the last 3 years. What kind of tax would you have them pay? pint of blood?

Well then, one would surmise that tax recovery is the order of the day, given all that capital parked offshore, and all those endless tax evasion and tax avoidance schemes.

Factors in the reduction of the tax base:

Tax avoidance (legal) reduces the tax base.

Tax evasion (illegal) reduces the tax base.

Offshoring jobs reduces the tax base.

Deficit spending reduces the tax base.

Tax cuts for the wealthy reduces the tax base.

Pharmaceutical industry giveaways reduces the tax base.

Leveraged buyouts (even when they don’t lead to destroyed companies) reduces the tax base.

Securitizations, and multiple layers of securitizations of credit derivatives, reduces the tax base (both from the securitization process itself, and after the super-leveraging has created the fortunes of debt-financed billionaires, then the de-leveraging takes place).

Let's put this in perspective. The new issue of Forbes Magazine lists the 400 richest Americans. To qualify a person needed a total net worth of over one billion dollars (the March 23rd issue says there are 413 billionaires in the U.S.). If we were to confiscate the total net worth of each, forget whether it's lawful, Constitutional or whatever, the haul would total a little over 1.5 trillion.

These folks are now paupers, never to contribute to society again. And the 'take' wouldn't cover the deficit for THIS year.

The point being, aliterate or illiterate one, that Forbes or that other magazine which named Enron to be "America's Most Innovative Company" for six consecutive years running (Fortune, the BS rag), aren't authoritative sources.

They don't list how much money these tax evaders have parked offshore, nor how many billions and trillions they have avoided paying in taxes over the years (while Warren Buffet was writing that disingenuous Op-Ed for the NY Times, his company was still involved in a years long legal battle over payment of billions of dollars in taxes to the IRS).

The direct, one-to-one correlation between "defense" spending and the national debt is the premier cause, with those phony and worthless securitizations and credit derivatives as simply the backdrop for layering infinite debt against the government while enriching those debt-financed billionaires, and several debt-financed trillionaires (haven't yet seen that in your Forbes rag, huh, sonny?).

The absolute corruption in this corporate fascist state and fraud-based country called America must end.

The flagrant predatory capitalism of the Klepto-Plutocracy must end.

Morons like yourself, unable to do even simple arithmetic, are arbitrary and nebulous in mind and spirit.

I don't see how anyone who is paying attention doesn't see that the end game is outright wealth confiscation. If you are not a Lord, you are a serf. The American experiment was a unique aberration that appears to be on the verge of failure.

The "people" are being fleeced into thinking "the rich" need to pay their fair share - however, the problem seems to be with the devious conflating total crooks (sociopaths) with actual productive wealth producers! This is not the answer. Further, nor will they continue to produce when their wealth is confiscated. The world is not static, something the expert economists seem to forget.

Anyone who honestly understands the math knows this won't work anyway. So what's the point again?

And this does appear to be a Tyler based post (I didn't see any external author credited).

Yes, I am aware this won't generate much in the way of revenue in the scheme of things. That's not the point, it's the precedent that is important. It's the irritant of an overbearing,out-of-contol Federal Government MOVING UP THE FOOD CHAIN in those it affects as it struggles for survival that is important.

For you see, first screwed is the lower classes, then middle, then upper middle. Now the screwing appears to be moving into the lower echelon wealthy. That's well & good for it awakens more to exactly who is calling the shots. It's the very rarified, ultra-wealthy few that control central banks. As the system implodes resources get drawn in to protect the core. That leaves an ever increasing mass of newly disgruntled.

Good, we need them. Our side needs their raw,angry energy, their expertise.

Sure man. I mean, hey lets take all of their cash. Oh hey look, it didnt even make a dent in the deficit but we all felt a whole lot better about things because everyone is getting boned according to what the mob feels high income earners should be getting.

The point is this doesnt fix the fiscal problems our country has whatsoever. Theyre dicking around with class warfare BS when they should be enacting policy changes that might actually fix things.

Why does the Fed still pretend they need any tax revenue? Get it over with! Just abolish the income tax and IRS, and print the money it needs to spend. That way we'll have only one flat-rate tax (which is inflation) with total simplicity and fairness to all. Furthermore, this inflation tax will not only be levied on Americans, but on anybody in the world that holds dollars. As a result, it dramatically lessens the tax burdens of average Americans. Printing 2+ trillion dollars is absolutely no big deal. JP Morgan has derivatives worth 70 trillions

Without significant changes to the tax code you will never see the amounts of capital you envision by increased taxes on the rich.

It is also extremely difficult to quantify the amount of money that finds its way into the system as a result of jobs high income earners foster.

Our manufacturing base is almost nonexistent now compared to the 1950's. We are almost exclusively a consumer based economy now.

The flaw in your logic is that if the Congress is merely lackeys of the rich, which I also agree they are, you will never see a tax hike that affects those people unless there is a quid pro quo that results in a zero net loss or very close to it for those exact people you intend to see increasingly taxed.

Lets run the printing presses til they light on fire. Lets hyper inflate this son of a bitch until a piece of bread requires a 5/1 ARM against against a fucking shopping center to buy. Lets do it now, so that we can get our own National Labor Party together and the government can finally print its rightful money, backed by NOTHING but the country, no private bank, no interest bullshit (like NAZI Germany). We need this. Lets do it!

Very simply, the US doesn't have a revenue problem, it has a spending problem. The CBO's projection reveals this plan for the farce that it is and it's based on the assumption that the current figures they use for those projections are still valid in five, ten years.

On the flip side, maybe those incomes actually increase and provide more revenue than projected but if you've watched this country's economy gradually stagnate for the past thirty years, that's quite the leap of faith. This can has been kicked down the road so many times for so long, you can't even distinguish what used to be on the label although my guess would be either New Coke or Billy Beer.

TD...it only reduces the deficit by $6 Billion over 10 yrs...the rest gets eaten by the 'jobs' bill and other spending. Which means that one reduces the deficit by $600M each year or less than half a days spending per year. How is the rest of the deficit, much less the debt to be reduced? Hit the rich again? We know that won't happen.

In otherwords...they just shot their wad with taxing the rich on zero deficit/debt reduction. Now what?

Maybe we should be arguing WHY anyone should have to pay Income Taxes.

1. If the Government did not spend so much we all would pay lower Taxes.

2. How much of your Tax Dollar goes to redistribute Wealth to those who do not work. How much of your Tax Dollar goes to Special Interests, like GE who paid no Taxes.

2. If Congress created the Money there would be no compounding Interest on Money created from 0. How much of your Tax Dollars actually goes to Interest on the Debt and never touches the Principal? I would say close to 99%.

3. There was no Income Tax before the Federal Reserve. It was only established after the Federal Reserve was established. So, although I know to simplistic, if we abolish the Federal Reserve and abolish taxes on the Debt we could actually see a way to pay the Debt off, without Interest.

we should argue why anyone should pay any taxes. Taxation=theft No men should have to give up his property to another man under threat of force. If I steal your money it is wrong, so I can not delegate that right I do not have to someone else in the government.

In the book Erewhon by Samuel Butler, the main character gets to a land where they did not tax people with over one million of income at all, since they considered people who added so much value a gift from the gods.

nothing , but that is irrelevant. You could also do nothing without the sun, but that does not mean the sun should get a high wage.

The point is that profit is the following: Person X takes A,B and C as input and produces D. Profit=D-(A+B+C)

This means that the person making the profit makes the most valuable use of the resources in the opinion of the most willing buyers of A,B,C and D. This also means he creates most happiness. If someone takes toxic waste and turns it into gasoline, such a person makes a high profit and is a blessing from the gods. You want a person like that to control lots of resources, because that will be very beneficial to you as buyer of his output. He creates it at the lowest cost from the most useless resources.

D has some value. Profit alone does not generate happiness; especially if taking advantage of C to make use of B and A. It is entirely possible to generate more happiness by reducing profit and producing more D while more fairly compensating C and not squandering A and B. And we should not forget that the production of D sometimes generates externalities 'E' that may also reduce the happiness of C as well as the purchasers of D.

There are a defenitions missing. I never claimed profit alone generates happiness. What do you mean with 'taking advantage of C' ? If you offer the higest price for C, and C is owned by someone who gives it up voluntarily for that price, who is taken advantage off?

I don't think it can not be possible to generate more value producing D while making less profit. If you assume C is someones labour, sure you can squander more resources on C, while making D, reducing profit. This just makes these resources less available for E,F and G. You are the one forgetting extranalities here. In my definition of profit, all extranalities should be taken into account.

You speak of 'we are taking someone's money' where you should say 'they are taking someone's money', since you are not one of the takers not are you even one of the beneficiaries. You identify with your exploiters, it is called the stockholm syndrome.

The government is just a group of people with special privilige of violence. They can steal and murder with impunity. You don't want such a group in your midst. It will not benfit you. You might think that it won't hurt to steal from the rich and you even might think you will benefit and something is left over after they bought tons of bombs, drones and missiles to drop on brown people. You are wrong. Income tax started with 3% for the very rich, no one cared. Now the middle class is plundered for the bailouts of the rich.

The elites will not steal the money of other elites, to share th proceeds with the common man. The elites are not only better inventors, managers and producers, they also deal more effective with government. They have already turned the tables on you and this will not change. Their is a group of violent thugs in uniform in your mids and you will suffer because of them. They will not keep their word. They are not men of contract, but men of violence.

Your conditioning to say 'we' when you speak of those who are willing to use violence against you to make you obey them, is propagandized into you. They can not give anything, they can only take.

Again, total BS. I make a good living and pay my taxes. I vote and I organize with other activists to change the things in our world that I don't like. I hate the influence of corporations on our democracy. I don't support the wars, the huge military budget, corporate welfare, ethanol subsides, and other waste. I'm all for cutting the budget and trimming the deficit, but I'm also for taking care of my fellow man, creating jobs, educating our children without saddling them with enormous debt, and protecting the environment for future generations. I don't think budget cutting should be done on the backs of the poor and middle class. This is not about mind control or some secret agenda. We, as a country, need to decide on our common values and then act on them. Like it or not, the government is us. To divorce yourself from it is to not take responsibility for the wrongs committed in our name. It is about "we," as in "we the people."

Before you call BS, you might consider the idea that someone promoting consitent thinking, has taken your objections already into consideration and you have never looked into it and are just thinking on your feet, vulnerable to the indoctrination pumped into you by your enslavers.

The fact that you can have a good living while paying taxes, is completely irrelevant to anything. You have to do what another guys says-> you are a slave

I am also in favor of taking care of my fellow men and all these other things, I just do not advocate that some should be masters and some should be slaves to solve these problems. Solutions to these problems that are consistent with the way other problems are solved and consistent the reality of people not being so different that it makes sense to have masters and slaves.

You are not a country, like you are not a god or ancestral spirits. You do not need to have the same values in a country (this is even iimpossible), just respect someone elses values. A country is an arbitrary fence for the tax cows, put their by the tax farmers. If you approve of the coercion of others, you do not respect their values. If you do not respect their values, they will not respect yours.

There is a lot in the jobs bill that I don't like, but the 231K per job number is not really valid because it ignores that value of the public infrastructure that would be built as part of the job creation effort.

Any tax on the elites is a good start, as they have gotten far off easy for far too long, and have enjoyed the considerable fruits of a system designed, built and operated solely in their favor. But they - as do we all - deserve a govt and a budget that does not spend this money on bullshit. But the whining of the rich when they are forced to part with a few more of their precious dollars falls on deaf ears here. It's not like they give a rat's hairy puckered asshole about the rest of us, after all.

How much money has been stolen from the middle class simply as a result of the artificially low interest rates at the Fed? You can't even count that high. Please, save the tears for someone who cares, like our "representatives" in CONgress, the servants of the elites.

I love how the rich get all libertarian when it comes time to pay the bill.